Marchenko warned that Ukraine’s troubles would quickly spill over into the rest of Europe, through the channels of migration and inflation, notably in food and energy prices.
The International Monetary Fundexpects Ukrainian gross domestic productto grow by 2 percent this year, after Russia’s full-scale invasion caused its economy to shrink by 30 percent last year. But Ukraine continues to rely on allies to cover its budget expenses, half of which — $42 billion — relate to the war.
“The budget is quite simple. We can spend our taxes and our domestic borrowing only on our military, and for the civilian part of our budget we will rely on our partners,” Marchenko said. The Rada, Ukraine’s parliament, is set to vote onthe country’s budget for 2024 on Thursday.
Separately, the EU is facing complications over its planto use billions of dollars in frozen Russian assets to help the country’s reconstruction efforts. While EU leaders have backed such moves, some European governments are privately worried about the risks to financial markets.
Anti-corruption
Of around $43 billion in external financing needs, pledges by the U.K., Japan, the IMF and others are set to cover around $10 billion. Kyiv’s own efforts could stretch to another $4 billion, leaving a $29 billion shortfall.
The EU and the U.S. have been thelargest donorsto Ukraine since 2022. But opposition to further aid in some EU capitals and in the U.S. Congress is a cause of concern.
